WTO to take up India’s demand for permanent food security solution

NEW DELHI: The World Trade Organisation is likely to begin deliberations on India’s key demand of a permanent solution for food security this week, marking a step forward in multilateral trade talks after the country indicated that it was ready to accept permanent peace clause offered by theUnited States and start work on trade facilitation.

The matter is likely to be discussed at the global trade body’s committee of agriculture on Thursday, at its first meeting after India made its domestic agricultural support disclosure at the WTO in September after a decade that showed it was close to breaching the minimum permitted subsidy limit for rice.

The US, Australia, Canada, Japan and Thailand have asked India to make disclosures of the support it gives to its farmers for all 25 crops.

India refused to ratify the trade facilitation deal in July, seeking a simultaneous permanent solution on public procurement for food security. Officials said India is now willing to accept the US’ offer of an indefinite peace clause instead of a four-year window under which no country can be penalised for breaching the farm subsidy cap.

“The meeting of the committee of agriculture is a crucial one and may give a direction in which the talks of permanent solution for public stockholding are headed. Now since India is willing to pave the way for trade facilitation, other countries may like to seriously discuss amendment of agreement on agriculture,” said a government official.

At the last meeting of the committee in September, some members took the stand that unless trade facilitation issue was resolved, work on implementing the remaining measures agreed at the ministerial meet in Bali would not be taken up.

On Thursday, the committee may discuss India’s proposal to amend the outdated WTO norms for calculation of farm subsidies, which are based on 1986-88 prices even though global food prices have increased manifold since then. Inflation in India has soared 650% since then.

The current WTO norms cap the value of food subsidies at 10% of the value of total production of a particular food crop, based on prices prevalent in 1986-88. India’s proposal of amendment by either revising the base to a more recent year or the incorporation of inflation over the years to calculate the cap will allow developing countries to continue to procure foodgrains from farmers at minimum support price and sell them to poor at cheaper rates without violating the norms.